Sahara Housing Investment Corporation Ltd. (SHICL) Scam

Sahara is one of the giant company of Indian business person which was founded by Subrata Roy. He is the founder and chairman of Sahara Group of Companies. It has various other products where it works as Financial Services, Construction (Real Estate), mass media, retailing, IT & outsourcing. Sahara’s business have been reported as 682 billion rupees ($11 billion).

The Sahara group operates hotels, including the Plaza Hotel in New York and Grosvenor House in London, and it’s the official sponsor of Indian national field hockey team, Bangladesh cricket team, Indian cricket team, Pune warriors India team etc. is under the scanner for raising the 240 billion rupees ($3.9 billion) in bonds with 2 group companies which has been ruled as illegal, though it claimed that it has paid most of the investors’ money, SEBI(Securities and Exchange Board Of India), India’s market regulator, has rejected this claim.

Sahara conglomerate should refund Rs. 24,000 crore which it has collected from millions of small investors under the plan of pan India housing schemes named Sahara “Swarna” & “Rajat Yojana” along with 15% interest was to be given on the deposits to the investors.

The historic judgment which was made by honorable Supreme Court shocked the very foundations of Sahara India Real Estate Corporation Ltd. And Sahara Housing Investment Corporation ltd. (SHICL). The SC has made the judgment reaffirming the order from SEBI which said that the process of investment violated the protocols. The buried horrors can return back in case of irregularities or non-compliance by Sahara which in turn will allow SEBI to sell all its properties.

From where this Scam started??

It began with hopes, it begins with the middle class dream of owning a house, and it began with an effort to invest one’s lifetime savings for benefit which can earn lifelong benefits, it begins in trusting corporate conglomerates or real estate developers who make alluring promises.

And where does it ends?

The end is quite predictable as the investors is caught between the delayed projects, legal hurdles, blocked investment and economic escalation. In short it was as an investor trap. The investors were attracted by the advertisement, billboards or brochures assuring them intelligent housing affairs with most of them were false promises. How smart an investor may be he has opt for one of the offers which kept their hope alive in the competitive and unpredictable economic policy. Many of the investors have invested in the Sahara Housing Scam and are victim of this scam. They had reported legal notice to the Sahara Board that the investors where attracted with the advertisement and invested money in the projects such as “Sahara Swarn Yojana” & “Sahara Rajat Yojana”.It violated Housing Finance Company (NHB) Directions, 2001, National Housing Bank Act, 1987 & Reserve Bank of India Act, 1934 and the same is punishable offences under the said acts respectively. The SC on 31st August directed to return all the money collected through the sale of Optionally Fully Convertible Debentures (OFCD) in favour of SEBI. The court stated that it has violated the norms by raising money through the debentures from the public in the guise of private placements. The return was to be given with 15% interests per annum on the money from the date of issue to the date of payment refunded. This group were restrained from accessing the securities or raising the funds till they pay the full money of the investors.

What we really need to understand is we owe ourselves for our mistakes in investing and we can’t always blame the government for its policies.SC issued a non-bailable warrant against the owner of Sahara group for failing to appear for a court hearing about his involvement in a multi-billion scam. The police went to arrest him at his Lucknow house but he was not found later he told that he was at hospital as his mother was sick and she wanted his son with him. Later Roy wilfully surrendered himself before Lucknow police and is co-operating with all authorities. He along with other 3 other top executive of Sahara group were asked the question about their assets and investments in this fraud case so that they can pay the money of the investors. SEBI also asked for details of their personal assets so as such they can sell the assets and refund the money to investors.

Subrata Roy begged to SC to give one chance so as to prove that he will pay the money of the investors but he needs time and his intention of paying is also correct and not fake. He told the court that the scheme was for poor and not a fraudulent provided by the SEBI. ”It’s a beautiful human story, if u know about it you will love us and will pat my back” Roy said to SC, But SC overruled it and because of lack of guarantee it made the custody till 11th March’ 14 and sent him to Tihar jail in Delhi which is a famous jail and the cell allotted to him is just next to the cell of the gang rape accused ram singh who hanged himself couple of months ago. Before the hearing he was in the police custody where he was given VIP treatment. After leaving the courtroom he told that it’s the Best Award the country has given to me.

We all know that the dust has finally been settled down and the sensationalistic appeal of the scam has lost its charm. But it’s the pain of the investors and their hard earned money lost in the battle? Perhaps, it is! the refund of money will take lot time and the whole approval process can take years making it more difficult for the investors. Scams like this one teach us a good lessons but the scam thing is repeated again and every now and then? It’s because we, people of this country don’t self-judge ourselves properly before making such a big amount of investments on the glittering projects. It is the greed or the competition that continuously drive us to commit such faults again and again.